As They Look to Identify Savings in a High-Cost Mandated Area, Officials Walk a Delicate Legal Line, but See Room for Innovation

Educating students with disabilities—a federally mandated responsibility—is seen as one of the costliest services school districts must provide, and one of the last that can be cut.

The federal Individuals with Disabilities Education Act provides a set of protections for 6.6 million students—about 13 percent of total student enrollment—who have dyslexia, autism, intellectual disabilities, blindness, or other impairments that affect educational performance. Those students are entitled to a “free, appropriate public education” in the least-restrictive environment that meets their needs. Fail to provide such services, and parents can sue in federal court.

Those guidelines have led to the perception that special education is an untouchable expense, even in lean economic times. While states and school districts are encouraged to squeeze out every dime in other areas of spending, trying to save money in special education services is thought to be a third rail: Touch it, and you’ll get shocked.

“A lot of school districts want to avoid even the threat of litigation,” says Michael Griffith, a school finance expert with the Denver-based Education Commission of the States. “The minute you start talking about efficiencies for special education, there is a huge uproar from parents. People look at that as cutting back on things.”

But like everything else in the world of special education, the reality is complicated.

States and districts are able to adjust what they spend on special education, though the adjustments may not be billed as cuts. Districts can, for example, save resources by pushing for inclusion of as many of their special education students as possible in regular classrooms, though the rationale for inclusion is rarely framed in terms of cost.

Also, despite the perception that special education money is untouchable, at least seven states have asked, or plan to ask, permission from the U.S. Department of Education to cut their spending on special education for fiscal 2010 or 2011. The requests from Iowa, Kansas, and West Virginia have been granted; requests from Alabama, New Jersey, and South Carolina are under review; and Oregon planned to file a request in early 2011. And because of a provision in the idea that allows districts to cut back on local spending when more federal dollars come in, the infusion of more than $12 billion in one-time additional aid for special education under the American Recovery and Reinvestment Act—the economic-stimulus program—may prompt districts to make reductions in local spending that will last after the stimulus money is spent. Because of a technical loophole in the federal law, districts would not be required to return to their prestimulus levels of local spending.

Agreement Scarce

Even advocacy groups for students with disabilities don’t agree on what, if anything, should be done to address special education costs—other than a belief that the federal government should provide more resources. Some disability-rights groups argue strongly in favor of inclusion, while others believe the only way to properly educate some students is in smaller groups or special schools, which cost more than regular classrooms.

One point of agreement that cuts across advocacy groups is that special education funding is a tangled web.

“The piece that gets to me is, we don’t have an idea of what special education costs, and yet we continue to hear all this hot air about how expensive special education is,” says Candace Cortiella, the director of The Advocacy Institute, in Marshall, Va., a training and support group for people with disabilities and their families. She also runs the website idea Money Watch, which tracks special education stimulus funding.

The last in-depth, federally financed study on how states and districts spend their special education money was conducted by the Special Education Expenditure Project, a part of the Center for Special Education Finance, in Palo Alto, Calif. The SEEP researchers examined data collected during the 1999-2000 school year. That report, last updated in 2004, said that the 50 states and the District of Columbia spent about $50 billion on special education services. It also concluded that districts pay about two times as much to educate students in special education as they do to educate students in general education. But the study didn’t address whether those numbers are on target for the results that districts get, or whether districts should be paying less or more.

One noteworthy aspect of special education is that while Congress enacted the education policy for children with disabilities, states and districts shoulder most of the costs. Of the so-called “excess costs” of educating a child with a disability, which are costs over and above the cost of educating a general education student, the federal government covers about 17 percent through the IDEA. The remaining excess costs come from districts and states.

How a state chooses to pay for special education plays a big part in what kinds of services districts can provide and to how many children. Funding formulas can also play some role.

For example, 12 states use a “multiple student weights” formula, meaning they give districts a certain amount of money based on the severity of a child’s disability, according to an April 2010 report from Project Forum, a federally funded research center that works through the National Association of State Directors of Special Education, in Alexandria, Va. But some research has found that the multiple student weights formula can provide an incentive to place children in restrictive, and expensive, settings.

The Project Forum report found that seven states use a “census based” measure, which distributes an equal share of money to all districts, based on assumptions about the numbers of special education students they serve and their disability categories. Studies have found that this type of funding formula is correlated with a decrease in special education enrollment, presumably because there is no “incentive” to identify more students than average if the district’s funding from the state won’t change.

The problem with the census-based method, some say, is that it presupposes that students with disabilities are evenly spread through a state. It’s quite possible for one district to legitimately have more high-need students than another, says Bruce D. Baker, an associate professor in the graduate school of education at Rutgers University, in New Brunswick, N.J., and the lead author of a textbook on school finance policy.

Other funding methodologies, each with its own pros and cons, also exist. But Baker notes that individual districts have little recourse when states adjust their funding formulas or, as has happened with the seven states that plan to cut special education funding, cite severe economic hardship. There’s currently no method for a district to force a state to provide more special education money.

“Districts are at the mercy of what states are doing on their behalf,” Baker says.

So what are districts doing to get the most from the dollars they have? That is a question that Thomas B. Parrish, the director of the Center for Special Education Finance, is trying to answer using some California districts as models. His center is a part of the Washington-based American Institutes for Research, and has conducted several national and state-focused examinations of special education spending.

Often, Parrish says, the debate on special education finance reforms focuses on getting more money into the system, either from the federal government or the states. Research on outcomes is more rare: whether districts are getting the results they’d like to see based on the money they have.“This is not an argument for spending less in special education,” he says. “We should be spending every dollar to the maximum benefit.”

Parrish and his colleagues are examining some districts that, based on their demographics and funding, are getting better-than-expected test scores for special education students.

One common element in their success seems to be inclusion, Parrish says. The more students areincluded in a general classroom setting, the better their test scores seem to be.

“Almost every single one of [the districts to be profiled] told about some way that general education and special education work together collaboratively,” Parrish says.

A California Example

One of the districts to be profiled is the 10,500-student SangerUnified School District in Fresno County, Calif., where about 7 percent of students are in special education. The district has a population that is 80 percent minority, with 25 percent English-language learners, and 75 percent eligible for free or reduced-price lunches. It has a budget of about $5 million for special education, out of an $80 million districtwide budget, says Matthew Navo, the district’s director of pupil services.

California measures its schools on an “academic performance index,” or API, an annual measure of test-score performance that starts at 200 and tops out at 1,000. The target for subgroups to meet is 800 points. The students-with-disabilities subgroup in the Sanger district has risen from 501 points on the API in the 2007-08 school year to 651 points on the API in the 2009-10 school year.

By comparison, the API for the district’s overall student population has risen from 808 points to 823 points over that time. Though there is still a sizable gap between students in special education and their counterparts in general education, the growth in achievement among special education students is encouraging, says Navo.

Part of the improvement is based on a strategic move to more inclusion, Navo says. “We’re not out there trying to create a program for every different child. We have built-in supports that already exist,” he explains. “We push the staff and the school-site teams to meet service needs in the regular classroom.”

Navo also credits “response to intervention,” or RTI, an educational framework used to support struggling young readers, as playing a role in the district’s success compared with the records of many of its peers.

Other studies have also shown that well-done inclusion appears to be a common characteristic of districts that see higher test scores among students with disabilities. But some are wary of overstating the value of inclusion.

Patricia Lillie, the president of the Learning Disabilities Association of America, a large advocacy organization of parents, people with disabilities, teachers, and supporters, based in Pittsburgh, says inclusion is overused.

Inclusion “can be a good thing,” she says. But “there are so many kids who need that specialist or that one-to-one remediation. And they’re just not doing that anymore.”

Cortiella, of The Advocacy Institute, is in favor of inclusion done well.

“If we tried harder to educate students in their neighborhood schools with their neighborhood teachers, clearly it couldn’t be more expensive,” she says. “It may not be a matter of spending more or less, but spending what you have differently.”

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